Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Month: October 2013 Page 1 of 2

The Bailout Caused the Sucky “Recovery”

By

On October 30, 2013

Comments

This will be another brief post.  Bailing out banks, brokerages and so on in the way it was done had the following effects:

1) Fewer, larger financial institutions.  Too bigger to fail.

2) Rewarding people for outright fraud and insane risk taking. Remember, they kept their bonuses and salaries, they are rich, even if they belong to one of the few companies that went under.

3) A huge overhang of bad debts which has to be worked off.

4) An understanding that financial profits are still the way, you, personally get rich.

5) Making the rich, richer (yes, they are richer now)

The reason the economy has not recovered and will not recover for at least a generation is because of the overhang of bad debt, the glorification of financial “profits” (they aren’t), the failure to de-financialize the economy and the confirmed control of government by the rich.

In other words the bailout caused the sucky “recovery”, or, if we are to be honest, the current long Depression.

The standard argument is “we had to do something”.  Yes and no.

1) We could have done something else, like nationalizing the banks, making bondholders and shareholders eat their losses, taking what remains and putting it in bad banks, then breaking the banks up and re-privatizing them.

2) Actually, if we’d just let them go under per the law, with the FDIC taking them over, things would have been worse initially, but there would have been an actual, robust recovery when it occurred.  By now you’d be better off.  And the shock could have been cushioned with generous EI, letting people stay in houses and so on.

TARP, though it actually wasn’t the key bailout (those were done mostly through the Fed) is when Obama said “I am going to keep the same people who caused this mess in power in the financial system, make sure they don’t lose their money, and that’s just too bad for everyone else.”  When he confirmed that Bernanke was to stay on, he confirmed that he was, essentially, ok with what had happened.

The bailout decision did not “save the world” instead it doomed a good chunk of the world to twenty years of a shitty economy, minimum.  Forget the unemployment rate, the percentage of Americans employed hasn’t recovered, and won’t, and that’s before we talk about Europe.

This is the first of Obama’s legacies.

Progressive Blog #Fail: Moral Failure or Demographic Doom?

By

On October 29, 2013

Comments

(This post is written by Pachacutec, not by me. Pachacutec was a long time blogger at FireDogLake, and deeply involved in Netroots Strategy through 2009. – Ian)

By Pachacutec:

I read with interest my old friend Ian’s take on the failure of the progressive blogosphere, or “netroots,” from its beginnings in the early 2000’s until now. Ian and I had a little exchange about it on twitter, and he invited me to blog my take. Bottom line: I think Ian gets it partly right, but oversimplifies what happened.

Ian thinks the problem was essentially a moral failure:

So progressives have no power, because they have no principles: they cannot be expected to actually vote for the most progressive candidate, to successfully primary candidates, to care about policy first and identity second, to not take scraps from the table and sell out other progressive’s interests.

He also thinks progressives are more tribal than Tea Party conservatives are:

Unlike the Tea Party, most left wingers don’t really believe their own ideology.  They put partisanship first, or they put the color of a candidate’s skin or the shape of their genitals over the candidate’s policy.  Identity is more important to them than how many brown children that politician is killing.

[SNIP]

The Tea Party, say what you will about them, gets a great deal of obeisance from Republicans for one simple reason: they will primary you if they don’t like how you’ve been voting, and they’ll probably win that primary.  They are feared.

I don’t want to get distracted by this last point, but let me just state my opinion that Tea Party, liberals, and anyone else you can name are all tribal as hell, and just as tribal as each other. What made the Tea Party different in electoral effectiveness was Koch brothers’ money. There were moral failures in the netroots, most spectacularly in the ways that various people responded to scarcity, the dearth of any money to be made and food to be bought out of full time activist liberal blogging. But that’s not the big reason for progressive bloggers inability to translate online passion into raw political power.

My role in the netroots was part activist blogger and partly as a guy trying to find a way to get sustainable funds into progressive blogs. That meant I purchased and paid close attention to metrics of progressive blog audience demographics. One reason we didn’t become a destabilizing political force, able to shape policy and elect politicians, was because we just lacked the demographic reach to do it. We thought (hoped) we could be a populist wave for change. Turns out we were just a current.

Progressive blog audiences mostly reached more educated white boomers, and, with some exceptions, more men than women. Progressive blog audiences geographically reached all over the US, but their very dispersion made it difficult to get anything going on the ground where people of like mind could coordinate together. That limited audience reach and growth that could translate into coalition building and political power.

It’s true, as Ian hints, that our white boomer audiences were still mostly people who believed in institutions. They grew up that way. They were collectively shocked at the direction of the country and the corruption of media and government in the Bush years, but they were not radicals. They still believed in these institutions. Most wanted reform, not fundamental systemic change. They still listened to a lot of NPR.

This is what Ian is getting at in his argument, though I don’t see this so much as a moral failure as it is a lack of educated boomer tribal experience, a function of cohort. These boomers believed in the American Dream, but the next generation coming up is having a very different experience in its formative years. I see this as more of a systems phenomenon, related to how generations learn and form their assumptions, than as a collective moral failing.

Some bloggers tried to get around their weakness in organizing people on the ground by allying with unions, whose whole infrastructure of politics was about people taking collective action locally. But it was an uneasy alliance for tribal reasons: blog audiences were not working class and were far less diverse than the membership of service employee unions.

Without funds to amplify or rapidly escalate their local reach, the way the Tea Party has had, the netroots got bypassed by the fundraising and organizing machine of Obama campaign, which tapped the rising demographic wave ready to be plucked on the center-left: young people, women and people of color.

The 2008 primary wars were the worst time for progressive blogging, because the ugliest sides of latent liberal tribalism between the Clinton camp and the Obama camp were in full bloom. Obama held the netroots in contempt and allied with establishment forces and hedge fund money to suck all the organizing life out of the netroots. That’s what constitutes the “failure” Ian describes, but with hindsight, I don’t think there was any way we could have overcome all of these systemic obstacles. We lacked money, we were too narrow in our reach, too unorganized, and as a result, we could not overcome establishment efforts to beat us back.

We did have a partial victory with Lamont over Lieberman, where we succeeded in creating a local presence. However, as Ian points out, Lieberman won as an Independent. We have, in part, both the Clintons and Obama to thank for this. As validators, they helped Lieberman. Obama travelled right through Connecticut during the campaign and avoided an appearance with the Democratic nominee, Ned Lamont, reneging on a non-public promise. Lieberman had been his mentor in the Senate. None of this was an accident. Bill Clinton talked up Lieberman, in spite of the fact that Holy Joe made much of his name pontificating about Bill’s penis.

Still, the Lamont campaign showed the establishment that the netroots really had to be dealt with. Obama performed the hit, in what we have come to know as his signature Quiet American style. There were no drones involved, unless you want to use the word to describe paid and unpaid tribal attack hacks, rather than flying death machines. Either way, Obama never likes to leave fingerprints or get his hands visibly dirty.

What remains of the netroots is not a movement in itself but a continuing current. Some people came through this very clarifying period for one’s character scarred but with their integrity intact. Duncan (Atrios) and Digby still document the atrocities. Howie Klein fights the good fight for grass roots candidates and against the DCCC. Joe Sudbay works persistently and effectively for gay equality and disenfranchised immigrants. Marcy’s persistent OCD and ability to connect the dots influences the influencers and the debate on the NSA. Ian shakes his fist at us, challenges us and reminds us of things we try not to think about because we just want to get through our day. Even Tom Matzzie, who has left politics, pops up from his embedded perch to fuck with Michael Hayden. There are others as well, I’m just citing examples to make my point.

Collectively, we failed at our most lofty ambitions, though we didn’t fail at everything. But with climate change and the time it will take for a possibly more radicalized youth cohort to effect more radical economic and social change, it may all be too late. Then again, it took decades between God and Man at Yale and Ted Cruz. There is something to be said for just finding a way to hang around and keep the narrative alive. It’s about all we can still do, and below the level of institutions, there are signs the culture may be catching up.

Jerome Armstrong on the Failure of the Netroots

By

On October 28, 2013

Comments

(This a comment elevated from my post on the failure of the progressive blog movement.  It is written by Jerome Armstrong, not by me. Jerome was the founder of MyDD (Kos’s Blogfather) and co-author of Crashing the Gates, among other things- Ian)

by Jerome Armstrong

I didn’t see Lieberman’s 2006 win in quite as pinnacle a light at the time, and it certainly wouldn’t have been, had we followed it up more often, and won.

Yet I certainly peg the crux of lost movement with the rise of Obama’s campaign. It was an awful place to be in with Clinton vs. Obama, in the 2008 primary. My basic impulse (after Edwards –who had the populist message– imploded) was, like many bloggers (not the masses), to go with Clinton because she at least showed signs of being accountable to the netroots movement, unlike Obama. He didn’t need the netroots for his message and candidate-movement, he had places like Politico to push out of, and was basically an identity-politics cult for many new to politics that flooded the blogs.

But, I view the clincher happening a bit later, with Bill Halter’s loss in the 2010 Democratic primary in Arkansas. That is when it really ended. The whole Labor-Netroots coalition, Accountability Now, the blogs went all-in big (still barely united) with MoveOn and PCCC. Over $10 million to defeat a BlueDog that gave us this crappy corporate ACA debacle. But Obama did all he could behind to the scenes to defeat Halter. Obama dissed Lt. Gov Halter by embracing Lincoln (Michelle Obama once came to Fayetteville and recognized all of the politicians on the stage — Lincoln, and even Republicans — while ignoring Democratic Lt Gov Bill Halter standing behind her). Obama mailers pushed the LR area African-American vote into Lincoln’s camp in the run-off. Lincoln was a rural democrat– a base of voters that Halter took away from her. Obama being just neutral would have meant a Halter victory. But it wasn’t just the Lincoln victory, it was the way that national Democrats reacted to Halter’s message that convinced me the movement was finished. It took the attack site that we put up, BailoutBlanche.com, for me to see clearly what had happened.

This rising against the Democrats that aligned with the banks was the defining issue if this was to be a populist progressive movement within the party in 2010. We rolled it out with Bill’s campaign, and it struck her hard. Halter’s numbers soared among  rural Democrats, taking on the banks was the top polling issue. Halter was gaining on the issue, overtook Lincoln, and the Democratic Party backlash against him was immense (it’s when Obama got involved heavily too). Halter buckled, and made us take down the website. A symbolic cave. Lincoln won the run-off by 4 percent.

Another flawed candidate progressives sided with? Sure, but it really didn’t matter in the big scheme of things. When Democrats sided with the banks in 2008, and the progressive movement balked at primary challenges against those bankster-sponsored incumbents in 2010, it was all over.

The night of Halter’s loss, I sunk into a couch at the Excelsior in Little Rock across from PCCC’s Adam Green and Stephanie Taylor. We all just slumped over speechless. So yea, contrast that with the highpoint party we had when Lamont defeated Lieberman in the ‘06 primary in Connecticut– when MoveOn’s Tom Mattzie was busting open the biggest champagne bottle I’d ever seen. This is where we arrived 4 years later. When, after having $10M to spend in a primary against a incumbent that sided with the banks and defeated the public option in the Senate, all it proved was that the sitting Democratic President was against us.

I would agree with your general basis of criticism, that of our movement being non-ideological to a fault, but I am not convinced that is a defining feature of the reason for the failure. First, we just have to recognize that Obama (and Clinton, for that matter) are hugely compromised politicians. Flawed liars, and the most responsible for the failure of enacting a “progressive” agenda. And second, that the Democratic Party as an establishment voice can be summed up pretty much the same way. Wellstone and Feingold are gone, and no one else has stood up.

You know, when Markos and I wrote Crashing The Gates, just when we finished the draft, I had an OMG moment, saying to him–”you know, we haven’t said at all what we meant by ‘progressive’ throughout the book.” I threw in a link in the footnotes to something about it moving things forward, but really, it made me pause to wonder at my faith that they meant what we meant. So, I’ve had to accept the failure to grasp that insight. We thought it was just about using tough tactics and the rest would follow. Because we knew it was the moment for the Democrats to have a massive majority. Fuck, weren’t we naive?

I left the Democratic party after 2010– threw away the whole Gravy Train Democratic consulting gig. Sure, I didn’t like the way that my entire world got dropped. I too put some years into it. As a sort of cleansing, last cycle I went to work helping to primary some incumbents in both parties for a rich Texan PAC, and managing libertarian Gary Johnson’s internet campaign. I felt a lot clearer and cleaner having done the partisan purge. It made me realize that libertarians and progressives have a lot more in common than do either libertarians with the Republican party or progressives with the Democratic party. I’ve also come to believe that this alliance is where the next movement is.  It scares the shit out of the major parties, and the Government as a whole.

Yesterday, I was out on the DC Mall with this alliance. Against the surveillance state. Syria was another moment. SOPA also, and Audit the Fed. It’s a paradigm shifter, and it’s going to happen more and more. It could turn into something even bigger.

The alliance of progressives and libertarians (lets call it that for lack of a particular name for now) isn’t, for the most part, going to attract the purity-partisan types, the Democratic socialites like Tom Watson of Joan Walsh, or Daily Kos (though maybe Markos will get around to writing his “Libertarian Democrat” book and make a sea change there), but it’s going to happen regardless.

The oomph of the Democratic party in the blogosphere today can be summed up with a cursory glance at posts and comments on Balloon Juice, Little Green Footballs and Booman Tribune. They bend over backwards to justify the party bailing out banks, the nation going deeper into debt with global military expansion, and spying on citizens, yet they’ll nitpick that a libertarian is willing to allow abortion to be a state issue. They are more concerned with attacking truth-tellers like Julian Assange, Glenn Greenwald, and Edward Snowden than they are keeping anyone accountable or demanding transparency. That’s what they are really good at– justifying why the powerful should stay so and attacking the ones who challenge power. And, if needed, providing a handy social lifestyle issue to keep the division. There’s no energy left. Nothing that inspires people that are pissed off and want change. Just finger-pointing at the other team. It’s become pointless and principle-less tribalism.

We saw a big step with the netroots organizing last decade. It was the most exciting thing to happen within the Democratic Party in decades, but I now view it in a wider scope, without the partisan obstacle.I don’t think it’s over. It is dark. The internet is still hopeful for organizing a revolution. What I saw happen with the movement against Obama invading Syria tugged at my attention. Maybe we still could have some real transformational shifts happen, in the US and globally. I hope so. I’m counting on it to keep my sanity from making the traditional American blitz. When things get too tight, picking it all up and moving further west… to some remote pacific island. No wifi, just yoga :)

A brief note on why the progressive blog movement failed

By

On October 27, 2013

Comments

In the early 2000s progressive blogging seemed like a big deal.  At the first Yearly Kos, as it was called then, big name politicians came and kissed our ass.  We were covered by major newspaper and TV outlets.  Etc…

Today, we are nothing.

The reason is simple: we could not elect enough of our people. We could not instill sufficient fear.  We could not defeat incumbents.  We did not produce juice.  Clark and Dean didn’t win the 2004 Presidential nomination. Dean was taken out in a particularly nasty fashion (via the manufactured Dean Scream.)

The turning point was when Joe Lieberman, though defeated in a primary, managed to be elected anyway.  After the 2006 House capture by Democrats, Pelosi’s democrats betrayed the fundamental principles that the prog blogosphere stood for: they did nothing to stop the war, for example.  The Prog blogosphere took it, and worse, most of the blogs that did come out against House Democratic Vichy behaviour, lost audience.  (Yes, they did. I tracked this stuff carefully at the time.)

The nail in the coffin was the 2008 primaries.  To put it simply, Obama bypassed the blogging gatekeepers. Commenters, whether free or bought (and yes, I believe many were on the payroll) capsized DKos and other major blogs.  Obama did not need the gatekeepers, he simply bought out the movement.  The bloggers were irrelevant.  At least one major blogger acted as a conduit for Obama hits: was fed oppo, and put that oppo out there.

After 2008 everyone knew that they didn’t need prog-bloggers and that they didn’t really need to fear bloggers. (They may be annoyed by “Firebaggers”, they do not fear them.)

Unlike the Tea Party, most left wingers don’t really believe their own ideology.  They put partisanship first, or they put the color of a candidate’s skin or the shape of their genitals over the candidate’s policy.  Identity is more important to them than how many brown children that politician is killing.

So progressives have no power, because they have no principles: they cannot be expected to actually vote for the most progressive candidate, to successfully primary candidates, to care about policy first and identity second, to not take scraps from the table and sell out other progressive’s interests.

The Tea Party, say what you will about them, gets a great deal of obeisance from Republicans for one simple reason: they will primary you if they don’t like how you’ve been voting, and they’ll probably win that primary.  They are feared.  Progressives are not feared, because they do not believe enough in their ostensible principles to act on them in an effective fashion.

That is why the progressive revolution of the early 2000s failed.  If you want the next left wing push to succeed, whatever it is called, learn the lessons of the last failure.

(Note: I poured years of my life into the movement. Its failure is my failure, and I take no pleasure in it at all.)

44 Explicit Points on Creating a Better World

By

On October 25, 2013

Comments

1) Ideology is key.  If you like (or were horrified by) my Baseline Predictions post, understand that the next two posts on ideology were about the solution.  Our decisions about what to do are virtually always ideological.  You cannot think about any complex subject without ideology, without idea structures mediating.  You cannot decide what to do without making judgments that are mediated through you world-view.

2) We know much of what must be done.  We know we need to do it.  We have not done it.  That suggests this is not a “practical” problem.

3) The structure of everyday life (job work, regimented schooling for children, passive entertainment, consumer “choice” that isn’t real choice) produces our world-view, our ideology.  We are left passive and accepting of social arrangement, unable to see that there are different ways to live.  We accept the world as it is, and accept systematic injustice, even injustice that directly and clearly injures us.

4) The problem of collective action is one part belief: people must believe they should do things differently.

5) Any social structure, including social structures which seek to change the dominant culture, if it can be bought out, will lose.

6) Any new social structure must throw off surplus that people can live on, and that surplus must not be able to be bought up by the old system, which will seek to do so.  The ban against selling out/being bought out must be irrational and ideological.  Rational people sell out.

7) The forms of the old world must be gotten rid of, and must be seen as anathema. You cannot save the world and keep American style suburbia as it is now.  You cannot change the world so people are happy and healthy and prosperous and keep wage labor as your primary method of distributing surplus value to the commons.

8) You cannot keep profit, aka. greed as the primary driver of social decision making.  Eating is for living, living is not for eating, to paraphrase Socrates.

9) Greed as primary driver leads to sociopathic behaviour being rewarded (read Barkin’s “The Corporation”).  This means you select, systematically, people who act sociopathically or pyschopathically as your leaders.  You get the behavior your reward, and right now our system rewards people for doing whatever it takes to make money, no matter what the costs to other people, to the environment or the future.

10) Most profits today are extracted value, they are not actual surplus value.  Instead they represent destruction of actual economic productivity.  Every cent the financial sector “earned” from 2000 to 2007 was destroyed, ten times over, in the crisis and the depression after the crisis.

11) Actual value is not rewarded.  A janitor or a garbageman or a teacher or a nurse or an assembly line worker or an engineer produces real value.  If the CEO does not come in tomorrow, so what?  If the janitor doesn’t, everyone is complaining immediately.  The people we call value creators today are mostly value extractors: their job is to squeeze hard, to monetize, not to create new products which are genuinely beneficial to the world, not to create workers who are well paid and thus able to provide demand, not to create better paying work, but worse paying work.

12) If you need a job to survive, you are always at the mercy of people who provide jobs.

13) The wage you are paid is based on the tightness of the labor market and how protected  you are by government. It has virtually nothing to do with your personal skillset, except to the extent that skillset is in short supply.  As programmers found out, corporations and government will do everything they can to make sure any specific labor shortage is reduced as quickly as possible.

14) You have power, as an ordinary individual, only if you act as a group and in solidarity.  If you can be bribed to betray other ordinary people, they will play you off against each other.

15) Jobs aren’t a good way to distribute surplus, but if that is how you do it, you will only get surplus in a tight labor market.  Central banks, the rich, corporations and government today all work systematically to make sure that there is no tight labor market.  If there is no tight labor market, you can and will be replaced.  If you can be easily replaced, there is no reason to give you any extra money, even if you are producing more than you did in the past. It is for this reason that for over 30 years now NONE of the productivity gains have gone to ordinary workers on aggregate.

16) The economy must be completely electrified.  Energy must be made, to the largest extent possible, a capital good, this is a specific instance of the next point:

17) Supply bottlenecks cannot be allowed.  Ever.  Whenever one starts to form, it must be broken.  Failure to do so is why the post-war liberal order failed and was replaced with neo-liberalism.

18) You cannot use up sinks (like carbon storage in the atmosphere) faster than they can be regenerated.  Period.

19) You cannot allow degradation of food or environment.  These are major causes of the degenerative and chronic diseases which are epidemic in our society.

20) You cannot allow significant unproductive consumption to be a major part of your economy.  Suburbia, for example, is essentially pure consumption.  All bans on productive work, agriculture, etc… in suburbia must be removed.

21) You cannot allow public goods, like education or health care, to be rationed based on ability to pay.  Paying for schools through property taxes creates an education system which wastes the human potential of millions of people in an attempt to replicate class privilege.  Ironically, the middle class is failing anyway, as the economic value of education has been destroyed.

22) The most important rule of all is this: your elites must experience the same life as ordinary people.  They must go to the same shitty schools (no private schools, no enriched schools, no Ivy League).  They must fly on the same planes and go through the same security (they don’t), they must use the same healthcare and stew in the same wards in the same rooms as the poorest of the citizens.  They must eat the same food, rather than being able to buy high quality food the poor can’t.  If they don’t experience what you experience, they will not care what is happening to you.  And they don’t.  Why should they when they’re the richest riches the world has ever known. The world is great, to the rich and powerful.

23) You have power to the degree you have solidarity, control your own government, and have the ability to support yourself without a job.  If you cannot walk, if you have no ability to say “screw you”, then you are a slave, the only question is who you are a slave to.  The people we feel worst for today are the unemployed who can’t even find a master.

24) People who actually create value must be allowed to keep enough of it.  Right now they aren’t.  Google takes almost all the value created by the people who actually make the web, for example.  Wal-mart crushes its suppliers into the dust.  A few key  pipelines like App Stores, Amazon, and so on take almost all of the surplus value.  Anyone who thinks 30% is a reasonable charge for an app store wants to see failure (this doesn’t mean no taxation, proper taxation takes away unneeded surplus, not needed surplus.)

25) A regular rate of return of 5% is reasonable.  A world in which you have to make 15% or 30%+ to be viable is a world in which most businesses are not viable, and in which millions sit idle with nothing to do because there is nothing to do that can make those sort of returns.

26) Returns of 15% or more can only be made through fraud, exploitation or oligopolistic practices.  Bad or fraudulent profits drive out real profits and real value creation.

27) The network effect is not something which should be rewarded with a 30% commission.  Neither is the railroad effect “nice product you got there, son, but it doesn’t get to market if you don’t pay us our vig.”

28) We can all be prosperous, but we can’t all be rich.  Having hundreds of billionaires is exactly why you haven’t had a real raise in 30 years.

29) Concentrations of wealth are used to protect that wealth and buy up the system.  That is why they can’t be allowed.  The first thing someone does who wins the market, is buy the market, and that means buying the government.

30) Government is either your worst enemy, or you best friend, depending on whether it is controlled by the public, by private interests or running rogue.  But government is also the only major organization which can work for ordinary people.  Every other organization has another purpose.  As such, you must control government if you want prosperity.

31) Government, under whatever name, is needed to do things we must do together for the greater good.  When it does not exist, you get Somalia.  Great cell phone service, but your daughters get pulled out shacks at 2 am and raped, or you buy your safety by submitting to an oppressive set of relgous laws.

32) You cannot have large standing armies and keep liberty.  Period.

33) You cannot give private entities the right to print money without extremely strict limits and not expect unreasonable concentration of money, which means power, which means the government gets bought out and you lose both your liberty and your freedom.

34) Biodiversity is wealth, it is where the great biochemical advances and products of the future will come from. Every time we kill a species, we impoverish our future.

35) We are going to require a transnational body with armed forces to enforce environmental controls.

36) Fines no longer work to control economic activity, we will require outright criminal bans and tough enforcement to stop rapacious corporate behaviour.

37) If you must have the cheapest devices, you are requiring a woman in the Congo to be raped and rivers in China to be polluted.  Fixing this is not an individual action, it is a collective action problem, it can only be fixed by government and by terrible things like, oh “tariffs”.

38) Free Trade is meaningless if you don’t have full employment.  It is a rounding error at best, harmful at worst.

39) Capital flows cannot be allowed to move faster than trade flows and really shouldn’t be much faster than labor flows.

40) The functionless rich cannot be allowed to keep the money they have.  Use it for actual new production, or lose it.

41) Inflation is not a bad thing below about 10% or so.  There is no good evidence it reduces growth, and it does break up concentrations of wealth.  We are terrified of inflation because we know our wages aren’t rising faster than it is.

42) People who make a bad loan, should lose their money.  There is no such thing as free money, and bondholders need to learn that.  Concomittent, bankruptcy must be easy to get: economic cripples, unable to discharge debts are not in our economic interest.  It is especially abhorrent that bankruptcy cannot discharge student loans.

43) An economy in which people are free to do what they love, free of fear of losing everything, is far more economically productive than one in which people are forced to do things they hate to make ends meet.

44) The right thing to do, ethically, is usually the right thing to do economically. Helping the distressed is good for the economy.  Universal healthcare that doesn’t give extra money to insurance companies is good for the economy.  Believe it or not, not dumping pollution into air and not poisoning food… is good for the economy.  Feeding the poor is… good for the economy.

If you’re ever not sure what the right economic policy is ask yourself what the kind thing to do is.  You’ll be right nine times out ten, and the remaining one time you’ll still be doing something good.

 

How to Create a Viable Ideology

By

On October 23, 2013

Comments

The most important question about any ideology or social structure are: “Does it win?” and “Can it defend itself?”

Hunter-gathering, if the land-capacity isn’t close to carrying capacity, is usually a pretty good way to live. What we see in the archaeological record is that when the land gets close to carrying capacity, there is ton of violence, the number one cause of death of adult males becomes violence. Enough below the carrying capacity and there is very little violence. This is a generalization, there are exceptions, but the data seem to indicate it is generally true.

Hunter-gatherers are, generally speaking, healthier than agriculturalists and pastoralists. They live longer, suffer less from disease, are taller, the women have wider hips and suffer less from childbirth, they have better dentition and so on. The societies, again with some exceptions, are more egalitarian than most agricultural societies (though very early agricultural societies are more egalitarian than late hunter-gatherer societies, again, in general). They also have vastly more free time than agriculturalists.

Basically, being a hunter-gatherer is about as good as it gets for most of human existence. There are some better agricultural societies to live in for brief periods (certain periods of Roman history, say) but they are rare. Industrial society produces better medicine and goods, but we work harder and have vastly more chronic disease even at the same age, and industrial society includes, as its concomitant, things like the widespread rape in the Congo and African poverty–that’s a requirement of our society, it’s not incidental.

But hunter-gatherers lose confrontations with pastoralists and agricultural societies. It’s a great way to live, but more dense societies were better at violence, so hunter-gatherers were forced to the margins.

Whatever your society is like, it has to be able to win confrontations. However your ideology organizes your society, even if that ideology produces a much more enjoyable society in which to live than your competitors, it must be able to persist in either the long or short term against its competitors. Otherwise, you’ve got a problem.

Time-scale matters. An ideology that produces a society that lasts for 150 years of pretty wonderful life then loses to someone better at violence might look pretty damn good to most of us.

An ideology may also have internal contradictions which doom it. The Soviet form of Marxist-Leninism was vastly successful in its early years, something we forget now. During the Great Depression, the USSR was doing far better than most of the rest of the world (except the fascist bits). The USSR is the only country larger than a city state to industrialize using anything but mercantilism. I am aware of no other exceptions.

But the USSR’s control mechanism could not deal with the information problem. It worked gangbusters at first, but then parties formed who were able to control information flow to the central planners, doomed it. Mancur Olson, in his book Power and Prosperity, deals well with both the rise of the USSR and its fall.

Neo-liberalism has amongst its internal contradictions the complete inability to manage climate change. This contradiction comes from its insistence on short term interest and its refusal to deal properly with public goods. To neo-liberalism, the future exists only at the point a market starts discounting that future. Unfortunately for the world, markets suck at recognizing the future beyond a few years out, and by the time a market notices, the key decision points for heading off an undesirable future may well be long past.

(Neo-liberalism also has a pile of other internal contradictions, but this isn’t an article on neo-liberalism, so we’ll pass them by for now.)

Within an ideology are prescriptions for internal vs. external power relations. So a society must be able to win its fights with outside societies running different ideologies, but it also includes prescriptions for how power is divided internally. In the European Middle Ages, most of Europe was ruled by rapacious nobles, but the Swiss Cantons had male suffrage. This was based on the fact that Swiss Pikemen could beat the pants off feudal noble cavalry. But the requirement for Swiss Pikemen was economically prosperous men who could and would fight, not starved peasants. And men who could fight, and had to fight together, insisted on having power.  There is a direct analogy between this and classical Greek Democracy (made up exactly of the fighting population), and the Roman Republican period, where citizenry is divided into three classes, based in part on how they fought (the Equestrian class, above the Plebes, could afford to fight on horseback.)

Power comes in a number of flavors. You have violence. You have productive capacity.  You have consumptive ability. You have social ties. You have ideological production.  The more of each of these any group has, the more power they have. The more power they have, the more of the surplus production of their society (or, in many cases, the non surplus production) they are able to control.  If you want prosperity, you want power spread as evenly throughout your society as possible. You never want complete equality in outcome, because you do want some competition, it helps drive society forward, but right now our problem is the exact opposite: too much concentration of power, too little equality.

Each of those groups, and they will exist, will compete against each other. Different people have different interests. If one group or a coalition of groups gains more  power, they will also gain more of the productive surplus. Part of an ideology’s job is to make it so that, as much as possible, everyone’s interests in society are similar.

John F. Kennedy once said “a rising tide lifts all boats.” People took that as a descriptive statement, but in a society it is not, it is a prescriptive statement: if you want any increases in production to go to everyone, you have to make that happen, and to make it happen you have to believe it should happen. But the step before that is making sure that power is divided relatively evenly through society, so that it does happen. But, again, that is an ideological choice: many people don’t believe that everyone should have relatively equal power.

To have relatively equal power you cannot allow the means of production or violence to be overly concentrated.  Jefferson was making a profoundly practical statement when he warned that banks and standing armies were dangerous to a republic and democracy. Banks allow people to print money, those who print money make money, it gives them a powerful advantage over people who cannot do so. Those who control violence: well, I’m sure I don’t have to make that point.

It is for this reason, for example, that I believe everyone (male or female) should have military training.  It is not an accident that Switzerland, where every male has an assault rifle and military training, has such a high standard of living or voted on whether to have a guaranteed annual income. It is also why I believe in cadre armies and that no large standing armies should exist.  (The solution for money creation is more complicated, and I’ll go into it at a later date.)

If you want a society, then, which is prosperous and egalitarian, with the proceeds of increased production going to everyone and not just a few, you must have an internal structure of power which gives ordinary people quite a bit, makes concentration of power in private hands difficult, makes the government unable to use too much power against its own citizenry while (and this is the important bit) still being able to defend itself externally, and able to resist internal putsches. Egalitarian societies which cannot defend themselves get overwhelmed by hierarchical societies which are better at violence.

This extends to monetary matters. If outsiders with money can buy up your society and upset your internal political and productive relationships because they are more efficient, or just bigger, or have their capital more concentrated, if you will let them buy you up because some part of your society wants to cash out, then whatever internal relationships you have are vulnerable. This has happened to vast swathes of the third world, where Westerners come in and buy out traditional relationships. NAFTA pushed millions of Mexicans off their farms, made Mexico weaker because those people now needed to pay for food (often foreign, and also less nutritious), and made Mexico, objectively, worse off than before NAFTA. But some Mexicans got very rich by selling out.

This is a particular problem for smaller groups trying to create societies within larger societies. If you can be bought out, if some of you want to sell, take the money and run, you are not viable. Quakers and so on have an ideology which doesn’t allow for selling out this way, thus they are viable in the long-term, whatever one thinks of them.

So, an ideology, a belief system, among other things, tells you what is and isn’t legitimate to sell for money. A stable system says you can’t buy key parts of the social structure. In a functioning democracy, anything that comes even close to buying a vote, for example, is verboten. When we moved from late Feudalism to early industrialization, feudal rights were done away with–including the commons. Enclosure of land took away rights from people who had them before and gave those rights to other people. Serfs, for all we sneer at them, had rights. Those rights were taken away. The ex-serfs who flooded into early industrial cities after enclosure lived far worse lives than they had under late feudalism (this is WELL established). They lived shorter, unhealthier lives, worked harder to earn money which left them living in worse circumstances than when they were back on the land.

So when you’re creating a new ideology, or modifying an old one, you have to consider these points: the relation to the means of production, the ability to generate violence in defense or offense and the effectiveness of that violence, the question of whether the system can be capsized by money or if the key parts of the system are off-limits (due to irrational attachment, absolutely it must be irrational) to capsizing through money or equivalents. If you want an egalitarian prosperous society is power objectively divided up so that the masses have the ability defend their share of surplus production? How will those who do get a little extra (and they will always exist) or who control a little extra, try to capsize that system and seize more? What are the protections against what they will try and are those protections based on strong, irrational beliefs and backed up by a willingness to employ violence? (If you aren’t, and they are, you will lose. Period.)

Note, finally, the use of the word irrational. We think of irrationality as bad, but rational decision making leads to betrayal. If someone’s going to offer me more than I can otherwise earn to betray the rest of my people, a lot of folks are going to take that deal unless they have the irrational belief that it’s wrong, and a rational belief that if they do it, those who have an irrational belief in the system will hurt them, or even kill them.

This is ideology. Any ideological system that doesn’t produce people willing to die and kill for it, will lose to an ideology that does. The question is not whether violence is permitted, the question is when it is permitted. Most of us want to live in a peaceful society; I certainly do. But that peace is always and everywhere under-girded by rules about when to commit violence, a willingness to do so and an ability do it well. Societies and ideologies that do not do violence well exist at the sufferance of those who do, and live under the conditions and in the places that those good at violence permit. Generally very bad conditions.

If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.

Baseline Predictions for the Next Sixty Odd Years

By

On October 21, 2013

Comments

Today, I read this article on how the Ocean is dead: How the fish and birds are gone from huge swathes of it. You should read it.

Most people are absolutely lousy system thinkers, they don’t understand break-points: How you get long trends that suddenly break up or down, how self-reinforcing cycles work, and so on.

For some time, my baseline scenario has been as follows: We are so screwed.

We can expect a complete collapse of the ocean’s ability to provide fish. Japan, the worst offender in this, will also be the worst hit. That doesn’t make me happy, but it does make me laugh. This affects the oxygen cycle and, in the worst case, we could kill ourselves off entirely. Assuming we don’t, however…

We are currently seeing a hiatus in climate change. My friend Stirling predicted this years ago, and predicted it would be used simply to double down on stupidity like fracking. And it is being used thusly. If/when the sun warms up, we are fried. Various processes are past the point of no return; we are going to see huge methane releases from Russia, for example. We are going to have worse global warming than the worst mainstream predictions.

Climate change will continue to present itself as more and worse extreme weather events, like the nasty hurricanes we’ve been seeing hitting further and further north. We are going to also see changes in rainfall patterns; these will continue to devastate agriculture.

Aquifers are being drained dry, in ways that permanently damage them. This is happening in China, the US, India, and other places. This water will not come back. Large areas that are currently agriculturally productive will cease to be so, independent of climate change.

We will see huge dust bowls form, including in India, China, and the US.

There will be widespread hunger, because agriculture is going to fail. Period. Right now, hunger is due to distribution issues: We grow more than enough food to feed everyone, we just don’t care about feeding everyone. In twenty to thirty years, this will not be the case. Instead, we will just not have enough food.

Water will be as precious as hydrocarbons, which is, in part, because creating hydrocarbons requires water. Expect much of the world not just to be hungry but thirsty.

All of this is baked into the cake. We are past the decision points on all of these items—they will happen. They can no longer be stopped. Even if you concoct the most optimistic scenarios, we would need to act radically, right now, and we aren’t going to.

Let us now move the social sphere. We are creating an unprecedented panopticon state, one in which various technologies will conspire to make it so that individuals are tracked nearly 24/7, not just online but physically. Linking all the various cameras, RFID tags, aerial drones, satellites, phones that act as spies in our pockets, and so on, with algorithms which recognize our gait, our heat profile, our face, and so on, is a project which is well underway. The NSA may be the best at this, but every major Western government is playing this game, the NSA is merely the worst offender or the best at its execution. Private tracking is likewise ubiquitous: Companies have cameras which link your face to your credit card and purchase as you pay at the cashier, for example. Everything is tied together, and anyone stupid enough to think that these companies don’t share your information is a fool.

The preferred business model today is to make it so that no one owns anything. Everything is unbundled, and instead of owning it, you lease or rent it. The moment you can’t pay, it all goes away.  This is what “cloud” computing is about: a revenue stream. Lose your revenue, lose everything.  Ownership of DNA sequences, ownership of seeds, effective ownership of your intellectual property because it appears in someone else’s pipe (like Google using people’s endorsements without compensating them), you will own nothing, and all surplus value you produce in excess of what you need to (barely) survive will be taken from you.

To put it another way, the current business model is value stripping. All excess value is stripped from the social sphere (as with Google taking almost all of the value that content producers create by taking almost all of the value of ads, and they control almost the entire ad market). People who cannot gain enough of the excess value they create become economic cripples. Because the companies that make almost all the profit today are either financial companies, IP exploitation companies, or are taking value from the environment (like oil companies), there is not enough real economic growth, whatever the GDP numbers show (financial innovation isn’t, and JP Morgan and Goldman Sachs’ profits actually damage the real economy, stripping out value, not creating it).

There is no coherent ideology opposing this, no coherent alternative. Marxism died with the USSR, whether it should have or not. No new alternative to what is laughably called “capitalism” (what we’re seeing now isn’t) has arisen. The closest we have seen is the Pirate Party, but their ideology is too far from comprehensive and has too many holes in it, as they are concerned almost entirely with a set of issues around IP and privacy, which, while important, are not sufficient to create a new society complete with a new, humane, and ecologically sensible mode of production.

So we have runaway asset and value stripping, combined with truly insane damage to the conditions for production of food and energy. And no, photovoltaic solar is not going to save us. Certainly it is better than coal, natural gas, or oil, but most energy use in the world is not electrical, and Solar PV cannot produce the necessary baseline. Thermal solar and improved nuclear power made in breeder reactors are probably necessary for the transition, but the word “nuclear” scares everyone spitless (not without reason), so that’s off the table. And we’re going to burn.

There are always counter-reactions. I expect one when the Millennials come of political age, in the early 2020s. And I expect that the first round will fail, since it will be run by Millenials picked by their elders. The second round may succeed, but at that point we are into the 2030s.

While much of this is unavoidable, the amount of death and suffering is variable. We could lose a few hundred millions over the next eighty years whom we shouldn’t have lost, or we could lose a few billion. We could see billions descend into hunger and poverty, or we could find solutions which avoid most of that.

We will not avoid it if we continue with our current ideology of, simply, Greed. As long as we put ourselves first, as long as we decide that what is good for someone is what they’re entitled to do so long as the courts don’t actually put them in jail (and we don’t even enforce the laws on the book), we are not going to manage this chain of events to come down on the optimistic side of estimates.

We will need to create a whole new ideology, we will need to radically revamp our societies , and we will need to give up much we have cherished. Fortunately, much of what we have cherished has been, objectively, bad for us. People may want to live in suburbia, but it isolates them socially and makes them fat, sick, and unhappy. People may think they want pretty plastic packaging, but it’s why they eventually won’t have fish to eat that aren’t lice infested. People may think they want healthcare, but what they need is to be healthy, and that means healthy food and an environment that isn’t laden with unhealthy chemicals. People may think they want jobs, but what they need, and what they would be happier with, is the ability to produce what they need without working for a pointy-headed boss.

We’re going to run into this wall. Whether we run into it at a hundred miles an hour and go splat or hit it at ten miles an hour and get bruised and pick ourselves up is our choice. So far, our choice has been to run faster, but we can make another choice.

Most people who read this website are middle aged or older. If so, you’ll miss a lot of the worst of this. Your kids won’t. Your job, if you’re old, is ideological: To help create the ideas that are lying on the floor, the ideas that are used when people are desperate. When things change in crisis, they change fast, and the ideas that are used are the ones lying around. If all that’s lying around is neo-liberalism, that’s what will be used. Of course ideology isn’t enough, people can still choose the wrong ideology, the wrong ideas (and often have, don’t tell me otherwise), but if it isn’t there, all they can do is pick up what is there. That’s when you start getting idiots talking about “bending the curve,” as if slow incremental change won’t be overwhelmed by vicious cycles already in play, as if we aren’t already past key decision points, as if we shouldn’t already be in crisis mode and doing not dishwater reforms, but a radical remake of our societies.

We’re going to hit the wall. We’re going to have to fight a dystopic panopticon police state in which ordinary people are not allowed to own anything of real value, let alone keep any of the real value they create. We’re going to do this while the environment comes apart, while we get battered by “extreme weather events,” droughts, water shortages, and hunger.

That’s the baseline scenario. That’s what we have to be ready to deal with, to change as much as we can, to radically mitigate to save hundreds of millions or billions of lives, and to make billions of lives good, instead of meaningless existential hells.

An Old Gypsy Story

By

On October 19, 2013

Comments

In my twenties my landlord was an old German, Peter.  He had been a teenager during world War II, and liked to tell stories of his experiences.

One of his stories was about Gypsies.

Peter said, and I believed, that his family had been opposed to the Nazis. His father was a VP in Siemens and when Peter was caught, at a youth camp, listening to Allied broadcasts, he was able to save his son and have him assigned as an aide to a prison camp (no, not that type of prison camp) commandant. While there Peter got himself in more trouble and wound up in the camp jail for a couple of days. The cells in that camp faced each other, with a row of bars in between. The prisoner across from him was gypsy man and they spent two days playing cards and talking. At the end of it, the prisoner said, “today I will be hung as a partisan. You seem like a good man so I want to ask you if after the war you will go tell my people.”

After the war Peter did indeed go tell them, at what was apparently an annual meeting and fair in the South of France.  From that day on, he said that wherever he went in Europe, if he met Gypsies they always knew who he was, and would always help him if he needed it.

People seem to forget that Gypsies were one of the main targets of the Holocaust, along with Jews and socialists.  It’s still ok, today, to blood libel them as “child thieves” in a way that you can’t blood libel Jews in polite or even impolite company any more.

As for Peter, he fought for Hitler, and he was the kindest man I ever met.

Page 1 of 2

Next

Powered by WordPress & Theme by Anders Norén